AGREEMENT AND PLAN OF MERGER DATED AS OF MAY 17, 2007 BY AND AMONG REABLE THERAPEUTICS, INC., SPARTAN ACQUISITION CORP., AND IOMED, INC

Agreement and Plan of Merger

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IOMED, INC | Parsons Behle & Latimer, PC | ReAble Therapeutics, Inc, Spartan Acquisition Corp

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Title: AGREEMENT AND PLAN OF MERGER DATED AS OF MAY 17, 2007 BY AND AMONG REABLE THERAPEUTICS, INC., SPARTAN ACQUISITION CORP., AND IOMED, INC
Governing Law: Delaware Date: 5/21/2007
Industry: Biotechnology and Drugs Law Firm: Fulbright Jaworski Sector: Healthcare

EXHIBIT 2.1

AGREEMENT AND PLAN OF MERGER

DATED AS OF MAY 17, 2007

BY AND AMONG

REABLE THERAPEUTICS, INC.,

SPARTAN ACQUISITION CORP.,

AND

IOMED, INC.

TABLE OF CONTENTS

		Page
ARTICLE I	CERTAIN DEFINITIONS	1

ARTICLE II	THE MERGER	11
2.01	The Merger	11
2.02	Effective Time of the Merger	11
2.03	Effects of the Merger	11
2.04	Closing	11
2.05	Articles of Incorporation	11
2.06	By-Laws	12
2.07	Directors and Officers	12
2.08	Actions of Parent as Sole Shareholder of Merger Sub	12

ARTICLE III	CONVERSION OF SECURITIES	12
3.01	Effect on Capital Shares	12
3.02	Dissenting Shares	13
3.03	Stock Options	13
3.04	Surrender and Payment	14
3.05	Lost Certificates	15
3.06	Withholding Rights	15
3.07	No Further Ownership Rights in the Company Common Shares	15
3.08	Further Assurances	16
3.09	Adjustment to Per Share Price	16

ARTICLE IV	REPRESENTATIONS AND WARRANTIES	18
4.01	Representations and Warranties of the Company	18
4.02	Representations and Warranties of Parent and Merger Sub	38

ARTICLE V	COVENANTS RELATING TO CONDUCT OF BUSINESS	40
5.01	Covenants of the Company	40
5.02	Covenants of Parent	44
5.03	Governmental Filings	44
5.04	Control of Other Party’s Business	45

ARTICLE VI	ADDITIONAL AGREEMENTS	45
6.01	Preparation of Proxy Statement; Shareholders Meeting	45

		Page
6.02	[Reserved]	47
6.03	Access to Information	47
6.04	Required Actions	47
6.05	Acquisition Proposals	49
6.06	Fees and Expenses	51
6.07	Directors’ and Officers’ Indemnification and Insurance	51
6.08	Employee Benefits	53
6.09	Public Announcements	54
6.10	Section 16 Matters	54

ARTICLE VII	CONDITIONS PRECEDENT	55
7.01	Conditions to Each Party’s Obligation to Effect the Merger	55
7.02	Additional Conditions to Obligations of Parent	55
7.03	Additional Conditions to Obligations of the Company	56

ARTICLE VIII	TERMINATION AND AMENDMENT	57
8.01	Termination	57
8.02	Effect of Termination	59
8.03	Amendment	62
8.04	Extension; Waiver	62

ARTICLE IX	GENERAL PROVISIONS	62
9.01	Non-Survival of Representations, Warranties and Agreements	62
9.02	Notices	63
9.03	Interpretation	63
9.04	Maximum Liability	64
9.05	Counterparts	64
9.06	Entire Agreement; No Third Party Beneficiaries	64
9.07	Governing Law	64
9.08	Severability	65
9.09	Assignment	65
9.10	Submission to Jurisdiction; Waivers	65
9.11	Enforcement	65

LIST OF EXHIBITS

Exhibit A – Form of Voting Agreement among the Parent, Merger Sub and the Major Shareholders dated as of the date of this Agreement.

iii

AGREEMENT AND PLAN OF MERGER, dated as of May 17, 2007 (this “Agreement”), by and among REABLE THERAPEUTICS, INC., a Delaware corporation (“Parent”), SPARTAN ACQUISITION CORP., a Utah corporation and wholly owned subsidiary of Parent (“Merger Sub”), and IOMED, INC., a Utah corporation (the “Company”).

W I T N E S S E T H:

WHEREAS, the Boards of Directors of Parent and the Company deem it advisable and in the best interests of their respective corporations and shareholders that Parent and the Company engage in a business combination in order to advance the long term strategic interests of Parent and the interests of the shareholders of the Company; and

WHEREAS, to effect such business combination, the Boards of Directors of Parent, Merger Sub and the Company have approved and recommended this Agreement and the merger of Merger Sub with and into the Company (the “Merger”), upon the terms and subject to the conditions set forth herein; and

WHEREAS, concurrently with the execution and delivery of this Agreement, as a condition and inducement to Parent’s and Merger Sub’s willingness to enter into this Agreement, Ridgestone Corporation, Peter J. Wardle and Robert J. Lollini (the “Major Shareholders”) have each entered into a Voting Agreement, dated as of the date of this Agreement, in the form attached hereto as Exhibit A (the “Voting Agreement”), pursuant to which the Major Shareholders have, among other things, agreed to vote all of the Company Common Shares held by it for the approval of the Merger.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement, and intending to be legally bound hereby, the parties hereto agree as follows:

Article I

CERTAIN DEFINITIONS

As used in this Agreement, the following terms shall have the respective meanings set forth below:

“Accounts Receivable” means (a) all trade accounts receivable and other rights to payment from customers of the Company and the full benefit of all security for such accounts or rights to payment, including all trade accounts receivable representing amounts receivable in respect of goods shipped or products sold or services rendered to customers of the Company, (b) all other accounts or notes receivable of the Company and the full benefit of all security for such accounts or notes and (c) any claim, remedy or other right related to any of the foregoing.

“Acquisition Proposal” shall have the meaning set forth in Section 6.05(a).

“Affiliate” of any Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person.

“Agreement” shall have the meaning set forth in the preamble.

“Amex” means the American Stock Exchange.

“Antitrust Laws” means the HSR Act or other antitrust, competition or premerger notification, trade regulation law, regulation or order.

“Applicable Law” shall have the meaning set forth in Section 4.01(i).

“Arbitrator” shall have the meaning set forth in Section 3.09.

“Articles of Incorporation” means the Company’s Amended and Restated Articles of Incorporation, as amended and in effect as of the date hereof.

“Articles of Merger” shall have the meaning set forth in Section 2.02.

“Audit Committee” means the audit committee of the Board of Directors of the Company.

“Beneficial ownership” or “beneficially own” shall have the meaning ascribed to such terms under Section 13(d) of the Exchange Act.

“Benefit Plan” means any employee benefit plan, program, policy, practice, agreement, contract or other arrangement, whether or not written, including any “employee welfare benefit plan” within the meaning of Section 3(1) of ERISA, any “employee pension benefit plan” within the meaning of Section 3(2) of ERISA (whether or not such plan is subject to ERISA), any employment or severance agreement, and any bonus, incentive, deferred compensation, vacation, stock purchase, stock option, severance, change of control or fringe benefit plan, program, policy, practice, agreement, contract, or other arrangement.

“Business Day” means any day on which banks are not required or authorized to close in the State of Texas or Utah.

“Cancelled Shares” shall have the meaning set forth in Section 3.01(c).

“Cash at Signing Amount” shall have the meaning set forth in Section 3.09.

“Cash Shortfall Amount” shall have the meaning set forth in Section 3.09(e).

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, and the rules and regulations promulgated thereunder.

“Certificate” shall have the meaning set forth in Section 3.01(b).

“Change in the Company Recommendation” shall have the meaning set forth in Section 6.01(b).

“Claims” means any and all claims, causes of action, demands, complaints, requests for information, notices of noncompliance or violation, lawsuits, suits, proceedings or audits or other claims of any nature whatsoever.

“Closing” shall have the meaning set forth in Section 2.04.

“Closing Date” shall have the meaning set forth in Section 2.04.

“Code” shall have the meaning set forth in the recitals.

“Company” shall have the meaning set forth in the preamble.

“Company 2006 10-K” means the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2006, as filed with the SEC.

“Company Actual Expense Amount” shall have the meaning set forth in Section 3.09(d).

“Company Approvals” shall have the meaning set forth in Section 4.01(d)(2).

“Company Benefit Plan” means a Benefit Plan providing benefits to any current or former employee, officer or director of the Company or any of its ERISA Affiliates or any beneficiary or dependent thereof that is sponsored or maintained by the Company or any of its ERISA Affiliates or to which the Company or any of its ERISA Affiliates is party, contributes, or is obligated to contribute, or with respect to which the Company or any of its ERISA Affiliates has any liability, contingent or otherwise.

“Company By-Laws” means the Amended and Restated Bylaws of the Company, as amended and in effect as of the date hereof.

“Company Capital Budget” shall have the meaning set forth in Section 5.01(a)(2).

“Company Capital Shares” means the Company Common Shares together with the Company Preferred Shares.

“Company Common Shares” means common shares, no par value per share, of the Company.

“Company Cost Amount” shall mean an amount equal to $1,750,000.00.

“Company Cost Statement” shall have the meaning set forth in Section 3.09(d).

“Company Costs” means the documented, reasonable, out of pocket costs and expenses paid or contractually required to be paid by the Company to third parties and incurred by the Company for the negotiation, execution and delivery of this Agreement, responding to Parent’s due diligence inquiries in connection with transactions contemplated hereby and preparing for and conducting the Company Shareholders Meeting and for the consummation of the transactions contemplated hereby, including properly payable finder’s, broker’s or investment banker’s fees or commissions, accounting fees, Disbursing Agent fees and costs, retention

bonuses, attorneys’ fees, the SEC filing fees and the costs of printing and mailing the Proxy Statement for the Company Shareholders Meeting, the costs and expenses the Company incurs or pays to obtain any third party consents or approvals which are required to maintain the benefit of any Contracts to which the Company is a party following the consummation of this Agreement and the transactions contemplated hereby and the premium costs and expenses required to obtain the insurance policies in accordance with Section 6.07(b) but excluding (a) the Company’s ordinary overhead costs, salaries and compensation of the Company’s officers and employees and travel costs and expenses of such persons and (b) any such costs and expenses which were paid on or prior to the date of the Signing Date Statement, (c) costs and expenses related to the Payoff Letter referred to in Section 5.01(p) hereof, including payments made pursuant thereto and (d) costs and expenses incurred in connection with any and all Claims arising out of or in connection with this Agreement and the transactions contemplated hereby other than Claims to the extent arising out of or in connection with a breach or violation by the Company of any covenant or representation or warranty set forth herein.

“Company December 10-Q” means the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2006, as filed with the SEC.

“Company Disclosure Letter” means the disclosure schedule delivered by the Company to Parent concurrently herewith.

“Company Employees” shall mean the individuals who are employed as employees by the Company immediately prior to the Effective Time who remain employed as employees of Parent or any of its ERISA Affiliates after the Effective Time.

“Company March 10-Q” means the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, as filed with the SEC.

“Company Preferred Shares” means preferred shares, no par value per share, of the Company.

“Company Recommendation” shall have the meaning set forth in Section 6.01(b).

“Company SEC Documents” shall have the meaning set forth in Section 4.01(e)(1).

“Company Shareholder Approval” shall have the meaning set forth in Section 4.01(c)(1).

“Company Shareholders Meeting” shall have the meaning set forth in Section 4.01(c)(1).

“Company Stock Option” shall have the meaning set forth in Section 3.03.

“Company Stock Plans” shall have the meaning set forth in Section 3.03.

“Confidentiality Agreement” shall have the meaning set forth in Section 6.03.

“Consent Costs” shall have the meaning set forth in Section 6.04(a).

“Contract” means any legally binding lease, license, contract, note, mortgage, indenture or other agreement.

“Contract Consents” shall have the meaning set forth in Section 6.04(a).

“Debt” means any bonds, debentures, notes or other indebtedness other than in the ordinary course of business.

“Disbursing Agent” shall have the meaning set forth in Section 3.04(a).

“Disputed Items” shall have the meaning set forth in Section 3.09(b).

“Dissenting Share” shall have the meaning set forth in Section 3.02.

“Effective Time” shall have the meaning set forth in Section 2.02.

“Environmental Laws” means any and all applicable principles of common law and any and all laws, statutes, ordinances, rules, permits, regulations, or orders of any Governmental Entity pertaining to the protection of human health or the natural environment, including the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C. § 9601 et seq., the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (“RCRA”), the Federal Water Pollution Control Act, as amended by the Clean Water Act, 33 U.S.C. § 1251 et seq., the Clean Air Act, 42 U.S.C. §7401 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., and any similar state or local laws implementing or substantially equivalent to the foregoing federal laws, and all other environmental conservation or protection laws, in each case as in effect as of the date of this Agreement.

“Environmental Liabilities” means any and all liabilities, responsibilities, Claims, suits, damages, costs (including remedial, removal, response, abatement, clean-up, investigative or monitoring costs and any other related costs and expenses), other causes of action, damages, settlements, expenses, charges, assessments, liens, penalties, fines, pre-judgment and post-judgment interest, attorneys’ fees and other legal fees (a) pursuant to any agreement, order, notice or responsibility, directive (including directives embodied in Environmental Laws), injunction, judgment or similar documents (including settlements) arising out of or in connection with any Environmental Laws or violations thereof, or (b) pursuant to any Claim by a Governmental Entity or a third party for personal injury, property damage, damage to natural resources, remediation or payment or reimbursement of response costs incurred or expended by the Governmental Entity or Person pursuant to common law or statute.

“Environmental Permits” means all permits, licenses, registrations and other governmental authorizations required under applicable Environmental Laws.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

“ERISA Affiliate” means with any entity (whether or not incorporated) that is required to be treated as a single employer together with the Company under section 414 of the Code.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Expense Excess Amount” shall have the meaning set forth in Section 3.09(f).

“FDA” means the Food and Drug Administration.

“FDA Permits” shall have the meaning set forth in Section 4.01(n)(7).

“GAAP” means U.S. generally accepted accounting principles.

“Governmental Entity” means (a) any nation, state, commonwealth, province, territory, county, municipality, district, or other jurisdiction of any nature, or any political subdivision thereof, (b) federal, state, local, municipal, foreign, or other government, or (c) governmental authority of any nature (including any governmental division, department, agency, commission, instrumentality, official, organization, regulatory body, or other entity and any court, arbitrator, or other tribunal).

“Government Contract” means any contract the ultimate contracting party of which is a Governmental Entity (including any subcontract with a prime contractor or other subcontractor who is a party to any such contract).

“Hazardous Materials” means (i) any “hazardous waste” as defined by RCRA or under any applicable state analogue; (ii) any “hazardous substance” as defined by CERCLA and regulations promulgated thereunder or under any applicable state analogue; (iii) any petroleum-based products, by-products or waste materials; (iv) any other substance that by or under Environmental Laws requires special handling or notification of any Governmental Entity in its collection, storage, transport, treatment, or disposal; and (v) any other chemical, substance or waste that is regulated under any Environmental Law.

“HIPAA” means the Health Insurance Portability and Accountability Act of 1996.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

“Intellectual Property” means all (i) trademarks, service marks, brand names, certification marks, collective marks, d/b/a’s, Internet domain names, logos, symbols, trade dress, trade names, and other indicia of origin, all applications and registrations for the foregoing, and all goodwill associated therewith and symbolized thereby, including all renewals of same; (ii) inventions and discoveries, whether patentable or not, and all patents, utility models, registrations, invention disclosures and applications therefore, including divisions, continuations, continuations-in-part and renewal applications, and including renewals, extensions and reissues; (iii) industrial design rights/ design patents and all registrations and applications therefore; (iv) confidential information, trade secrets and know-how, including processes, schematics, business methods, formulae, drawings, prototypes, models, designs, customer lists and supplier lists (collectively, “Trade Secrets”); (v) published and unpublished works of authorship, whether copyrightable or not (including without limitation databases and other compilations of information), copyrights therein and thereto, and registrations and applications therefor, and all

renewals, extensions, restorations and reversions thereof; and (vi) all other intellectual property or industrial property or proprietary rights.

“Intellectual Property Rights” shall mean all proprietary or other rights throughout the world, including but not limited to proprietary and other rights provided under (A) patent law, (B) copyright law, (C) trademark and service mark law, (D) database law, (E) design patent or industrial design law, (F) trade secret law, and (G) any other statutory provision, common law principle or principle of law under any jurisdiction in the world that provides protective or other intellectual property rights in the Intellectual Property.

“Inventories” means all inventories of the Company, wherever located, including all finished goods, work in process, raw materials, spare parts and all other materials and supplies to be used or consumed by the Company in the production of finished goods.

“IRS” means the Internal Revenue Service.

“Knowledge” or “Known” means, with respect to any entity, the knowledge of Robert Lollini and Brian Mower, after due inquiry of employees of the Company having responsibility for the matter.

“Licenses” shall have the meaning set forth in Section 4.01(i).

“Liens” means liens, pledges, charges, encumbrances and security interests of any kind.

“Major Shareholder” shall have the meaning set forth in the recitals.

“Material Adverse Effect” means, with respect to any entity, changes, events, circumstances, conditions, occurrences, developments or effects that, individually or in the aggregate, has had, or would reasonably be expected to have, including those that will except for the passage of time only have, a material adverse effect on (a) the business, properties, assets, liabilities, operations, results of operations or condition (financial or otherwise) of such entity and its Subsidiaries, if any, taken as a whole or (b) the ability of such entity to consummate the transactions contemplated by this Agreement, except, in each case, for any such effect attributable to (i) a change in the trading prices of any of the Company’s Common Shares, in and of itself, (ii) entry into agreements, acquisitions and announcements of acquisitions by Parent or its Subsidiaries of the Company’s customers or the hiring by Parent or its Subsidiaries of the Company’s independent manufacturers’ representatives or employees of the Company’s customers whose principal duties are sales, (iii) changes in GAAP or Applicable Law after the date hereof, (iv) changes, events, circumstances, conditions, occurrences, developments or effects resulting from the announcement of the execution of this Agreement or of the pendency of the Merger, (v) changes, events, circumstances, conditions, occurrences, developments or effects resulting from compliance by the entity with the terms of, or the taking of any action specifically required to be taken in, this Agreement (other than the consummation of the Merger itself), (vi) changes, events, circumstances, conditions, occurrences, developments or effects or conditions affecting the business in which the entity operates generally, (vii) changes in economic, financial or political conditions generally, (viii) any act of terrorism or war (whether or not declared), and (ix) any failure by the Company, in and of itself, to meet projections, budgets or forecasts or published revenue or earnings predictions (the exclusions set forth in (i)-(ix),

the “MAE Exclusions”). Any party seeking to claim that a Material Adverse Effect has occurred with respect to the other party shall have the burden of proof to establish that any adverse effect is attributable to conditions, changes or events other than the MAE Exclusions; provided, however, that any such change, event, circumstance or development referred to in clauses (iii), (vi), (vii) and (viii) of the MAE Exclusions shall only fall within the MAE Exclusions if it does not (a) primarily relate only to (or have the effect of primarily relating only to) the Person and its Subsidiaries, if any, or (b) disproportionately and materially adversely affect the Person and its Subsidiaries, if any, compared to other companies engaged in similar businesses. For purposes of determining whether a Material Adverse Effect on Parent or Merger Sub has occurred, the exclusions set out in clauses (i), (ii) and (ix) shall not be applicable.

“Merger” shall have the meaning set forth in the recitals.

“Merger Consideration” shall have the meaning set forth in Section 3.01.

“Merger Sub” shall have the meaning set forth in the preamble.

“New Plans” shall have the meaning set forth in Section 6.08.

“Objection Notice” shall have the meaning set forth in Section 3.09.

“Old Plans” shall have the meaning set forth in Section 6.08.

“other party” means, with respect to Parent, the Company, and with respect to the Company, Parent.

“Other Representations” shall have the meaning set forth in Section 7.02.

“Parent” shall have the meaning set forth in the preamble.

“Parent Capital Stock” means the Parent Common Stock.

“Parent Common Stock” means common stock, $0.01 par value per share, of Parent.

“Parent Cost Reimbursement Amount” shall have the meaning set forth in Section 8.02(e).

“PBGC” means the Pension Benefit Guaranty Corporation.

“Per Share Cash Amount” shall have the meaning set forth in Section 3.01(a).

“Person” means an individual, corporation, limited liability company, partnership, association, trust, unincorporated organization, other entity or group (as defined in the Exchange Act).

“Proxy Statement” shall have the meaning set forth in Section 4.01(d).

“Qualifying Amendment” means an amendment or supplement to the Proxy Statement (including by incorporation by reference) to the extent it contains (i) a Change in the Company

Recommendation, (ii) a statement of the reasons of the Board of Directors of the Company for making such Change in the Company Recommendation and (iii) additional information reasonably related to the foregoing.

“Registered Intellectual Property” shall mean all Intellectual Property Rights that are registered or issued under the authority of, with, or by any Governmental Entity and all applications for any of the foregoing.

“Regulatory Law” means the Antitrust Laws, and all other U.S. federal, state and foreign, if any, statutes, rules, regulations, orders, decrees, administrative and judicial doctrines and other laws that are designed or intended to prohibit, restrict or regulate (a) mergers, acquisitions or other business combinations, (b) foreign investment, or (c) actions having the purpose or effect of monopolization or restraint of trade or lessening of competition.

“Release” means any actual or threatened release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into the environment.

“Remedial Action” means the removal, abatement, response, investigative, cleanup and/or monitoring activities undertaken to address any pollution or contamination, or a Release of Hazardous Materials, containment, removal, disposal, closure, corrective action, passive remediation, natural attenuation or bioremediation, and the installation and operation of remediation systems.

“Required Approvals” shall have the meaning set forth in Section 6.04(a).

“Revised Act” means the Utah Revised Business Corporation Act.

“Sarbanes-Oxley Act” shall have the meaning set forth in Section 4.01(e)(4).

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Significant Contract” shall have the meaning set forth in Section 4.01(m)(2).

“Signing Date Statement” shall have the meaning set forth in Section 3.09.

“Solvent” means: with respect to the Company on any date of determination that on such date: (a) the fair value of the property of the Company is greater that the total amount of liabilities, including contingent liabilities, of the Company, (b) the present fair salable value of the assets of the Company is not less than the amount that will be required to pay the probable liability of the Company on its debts as they become absolute and mature, (c) the Company does not intended to, and does not believe that it will, incur debts or liabilities beyond the Company’s ability to pay such debts and liabilities as they mature and (d) the Company is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which the Company’s property would not constitute an unreasonably small capital. The amount of

contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“State Healthcare Permits” shall have the meaning set forth in Section 4.01(n)(9).

“Subsidiary” shall have the meaning ascribed to such term in Rule 1-02 of Regulation S-X of the SEC.

“Superior Proposal” means, with respect to the Company a bona fide written proposal made by a Person other than a party hereto that is (a) for an Acquisition Proposal (except that references in the definition of “Acquisition Proposal” to “20%” shall be “50%”) involving the Company and (b) is on terms which the Company’s Board of Directors in good faith concludes (following receipt of the advice of its financial advisors and outside counsel), taking into account, among other things, legal, financial, regulatory and other aspects of the proposal, including any conditions to consummation of the proposal, as well as any amendments to the terms of the Merger or this Agreement proposed by Parent pursuant to Sections 6.05(b) and 6.05(c), (i) would, if consummated, result in a transaction that is (A) more favorable to the Company’s shareholders (in their capacities as shareholders), from a financial point of view, than the transactions contemplated by this Agreement, taking into account all the terms and conditions of such proposal and this Agreement and other factors reasonably deemed relevant by the Board of Directors of the Company and (B) reasonably capable of being completed on the terms proposed, in each case taking into account all financial (including the financing terms of such proposal), regulatory, legal (with the advice of outside counsel) and other aspects of such proposal, and (ii) which has no financing condition.

“Surviving Corporation” shall have the meaning set forth in Section 2.01.

“Tax Return” includes all returns and reports (including elections, declarations, disclosures, schedules, estimates and information returns) required to be supplied to a Tax authority relating to Taxes, including any schedule or attachment thereto and including any amendment thereof.

“Taxes” (including, with correlative meaning, the term “Tax” ) includes all federal, state, local and foreign income, profits, franchise, gross receipts, environmental, customs duty, capital stock, severances, stamp, payroll, sales, employment, unemployment, disability, use, property, withholding, excise, production, value added, occupancy and other taxes, duties or assessments of any nature whatsoever, together with all interest, penalties and additions imposed with respect to such amounts and any interest in respect of such penalties and additions and including any obligations to indemnify or otherwise assume or succeed to the liability for Taxes of any other Person.

“Termination Date” shall have the meaning set forth in Section 8.01(b).

“Termination Fee” means $750,000 plus out of pocket expenses not to exceed $250,000 incurred by Parent and Merger Sub in connection with this Agreement and the transactions contemplated hereby, including all filing fees and other costs for legal, accounting, financial advisor advice and services and travel.

“U.S. Company Benefit Plan” means each Company Benefit Plan that is not a Foreign Company Benefit Plan.

“Voting Agreement” shall have the meaning set forth in the recitals.

Article II

THE MERGER

2.01 The Merger . Upon the terms and subject to the conditions herein, at the Effective Time, Merger Sub shall be merged with and into the Company, with the Company as the surviving corporation in the Merger (the “Surviving Corporation”), and the separate existence of the Merger Sub shall thereupon cease. As a result of and immediately after the Merger, the Company will become a wholly owned subsidiary of Parent.

2.02 Effective Time of the Merger . The Merger shall become effective as set forth in the articles of merger duly filed with the Division of Corporations and Commercial Code of the State of Utah (the “Articles of Merger”). The filing of the Articles of Merger shall be made as soon as practicable on the Closing Date. As used in this Agreement, the term “Effective Time” shall mean the date and time when the Merger becomes effective, as set forth in the Articles of Merger. The Articles of Merger shall be in such form as is required by, and executed and acknowledged in accordance with, the Revised Act, and as mutually agreed by Parent and the Company.

2.03 Effects of the Merger . The Merger shall have the effects set forth in the applicable provisions of the Revised Act. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, except as otherwise provided herein, all of the property, rights, privileges, powers and franchises of Merger Sub and the Company shall vest in the Surviving Corporation, and all debts, liabilities and duties of Merger Sub and the Company shall become the debts, liabilities and duties of the Surviving Corporation.

2.04 Closing . Upon the terms and subject to the conditions set forth in Article VII and the termination rights set forth in Article VIII, the closing of the transactions contemplated by this Agreement (the “Closing”) will take place at the offices of Fulbright & Jaworski L.L.P. in Austin, Texas at 10:00 A.M. Austin, Texas time on the first Business Day following the satisfaction or waiver (subject to Applicable Law) of the conditions (excluding conditions that, by their nature, cannot be satisfied until the Closing Date) set forth in Article VII, unless this Agreement has been theretofore terminated pursuant to its terms or unless another place, time or date is agreed to in writing by the parties hereto (the date of the Closing being referred to herein as the “Closing Date”).

2.05 Articles of Incorporation . At the Effective Time, the articles of incorporation of Merger Sub as in effect immediately prior to the Effective Time shall be the articles of incorporation of the Surviving Corporation, until thereafter changed or amended as provided therein or by Applicable Law; provided, however, that the articles of incorporation of the Surviving Corporation may be amended in the Merger to provide that the Surviving Corporation

shall have a name after the Merger other than Spartan Acquisition Corp., which name shall be determined by Parent.

2.06 By-Laws . At the Effective Time, the by-laws of Merger Sub as in effect immediately prior to the Effective Time shall be the by-laws of the Surviving Corporation, until thereafter changed or amended as provided therein or by Applicable Law.

2.07 Directors and Officers . The directors of Merger Sub shall, from and after the Effective Time, become the initial directors of the Surviving Corporation until their successors shall have been duly elected, appointed or qualified, or until their earlier death, resignation or removal in accordance with the articles of incorporation and the by-laws of the Surviving Corporation. The officers of Merger Sub shall, from and after the Effective Time, become the initial officers of the Surviving Corporation until their successors shall have been duly elected, appointed or qualified, or until their earlier death, resignation or removal in accordance with the articles of incorporation and the by-laws of the Surviving Corporation.

2.08 Actions of Parent as Sole Shareholder of Merger Sub . Parent, as the holder of all the capital shares of Merger Sub, will, immediately upon execution of this Agreement, approve this Agreement and the transactions contemplated hereby and shall, as the sole shareholder of Merger Sub, adopt this Agreement. Parent shall take all actions necessary to cause Merger Sub to take any actions necessary in order to consummate the Merger and the other transactions contemplated hereby to the extent required hereunder.

Article III

CONVERSION OF SECURITIES

3.01 Effect on Capital Shares . At the Effective Time, subject to the other provisions of Article III, each of the Company Common Shares issued and outstanding immediately prior to the Effective Time (except for any Dissenting Shares) shall, by virtue of this Agreement and without any action on the part of the holder thereof, be converted into and shall thereafter represent the right to receive the following consideration (collectively, the “Merger Consideration”):

(a) Each of the Company Common Shares shall be converted into the right to receive $2.75 in cash (the “Per Share Cash Amount”). Total consideration to be paid by Parent in the Merger (assuming there are no Dissenting Shares and assuming there is no adjustment pursuant to Section 3.09 and that all options are cancelled and cashed out in full) shall not exceed $21,950,864. The Per Share Cash Amount shall be subject to adjustment pursuant to Section 3.09 hereof.

(b) From and after the Effective Time, all of the Company Common Shares converted into the Merger Consideration pursuant to this Article III shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of a certificate (each a “Certificate”) previously representing any of the Company Common Shares shall thereafter cease to have any rights with respect to such securities, except the right to receive the Merger Consideration.

(c) At the Effective Time, all of the Company Common Shares that are owned by Parent, Merger Sub or the Company (the “Cancelled Shares”) shall be cancelled and retired and shall cease to exist and no cash or other consideration shall be delivered in exchange therefor.

(d) Each issued and outstanding common share, par value $0.01, of Merger Sub issued and outstanding immediately prior to the Effective Time shall remain outstanding as one fully paid and nonassessable common share, par value $0.01, of the Surviving Corporation.

3.02 Dissenting Shares . Notwithstanding anything in this Agreement to the contrary, with respect to the Company Common Shares as to which the holder thereof has neither voted in favor of the Merger nor consented thereto in writing and who shall have delivered a written demand for payment of the fair value of such shares in the manner provided by the Revised Act and who, as of the Effective Time, shall not have effectively withdrawn or lost such right (each, a “Dissenting Share”), if any, such share will not be converted into, or represent the right to receive, the Merger Consideration. Such holder shall be entitled to payment, solely from the Surviving Corporation, of the fair value of the Dissenting Shares held by such holder to the extent permitted by and in accordance with the provisions of section 1301 et. seq. of the Revised Act; provided, however, that (1) if any holder of Dissenting Shares, under the circumstances permitted by and in accordance with the Revised Act, shall have effectively withdrawn his demand for payment of fair value of such Dissenting Shares or lost his right to payment for his shares of the Company Common Shares under section 1301 et. seq. of the Revised Act, (2) if any holder of Dissenting Shares shall have failed to establish his entitlement to payment of fair value as provided in section 1301 et. seq. of the Revised Act or (3) if any holder of Dissenting Shares takes or fails to take any action the consequence of which is that such holder is not entitled to payment for his shares under the Revised Act, such holder or holders (as the case may be) shall forfeit the right to payment of fair value of such of the Company Common Shares and such Company Common Shares shall thereupon cease to constitute Dissenting Shares. The Company shall give Parent prompt notice of any demands received by the Company for payment of fair value of shares or other dissenter’s notice of the Company Common Shares, and Parent shall have the right to participate in all negotiations and proceedings with respect to such demands. The Company shall not settle, make any payments with respect to, or offer to settle, any claim with respect to Dissenting Shares without the written consent of Parent.

3.03 Stock Options . The Company shall (a) terminate the Company’s 1988 Stock Option Plan and the 1997 Share Incentive Plan (collectively, the “Company Stock Plans”), immediately prior to the Effective Time without prejudice to the rights of the holders of options (each, a “Company Stock Option”) awarded pursuant thereto, (b) on or following the date hereof grant no additional options under the Company Stock Plans, and (c) cause each Company Stock Option that is outstanding immediately prior to the consummation of the Merger to become fully vested and exercisable. Prior to the Effective Time, the Company and Parent will take all actions reasonably necessary to provide that, upon the Effective Time, each outstanding Company Stock Option shall be cancelled automatically and at the Effective Time shall be converted into and constitute the right to receive cash in an amount (less any applicable withholding and without interest) equal to the product of (1) the total number of Company Common Shares subject to such holder’s Company Stock Option or Options immediately prior to the Effective Time and (2)

the excess, if any, of the Per Share Cash Amount over each specific exercise price per share of Company Common Shares subject to such Company Stock Option (each Company Stock Option with respect to which a payment is required to be made, an “Eligible Option”). No payment of the Per Share Cash Amount with respect to an Eligible Option shall be made by the Disbursing Agent to the holder of such Eligible Option until receipt by the Disbursing Agent of an option cancellation agreement, in a form that is mutually acceptable to Parent and the Company and consistent with the provisions of this Agreement with respect to all Eligible Options owned by the holder of such Eligible Option. The Per Share Cash Amount shall be subject to adjustment pursuant to Section 3.09 hereof.

3.04 Surrender and Payment .

(a) Appointment of Disbursing Agent . At or prior to the Effective Time, Parent shall deposit with a qualified disbursing agent, who shall be designated by the Company after giving Parent notice of such disbursing agent at least ten Business Days before the Closing Date and after receiving the prior written consent of Parent to the designated disbursing agent (the “Disbursing Agent”), cash in an amount sufficient to allow the Disbursing Agent to make all payments that may be required pursuant to Section 3.04. The Surviving Corporation shall be obligated to, from time to time, deposit with the Disbursing Agent any additional funds necessary to make all payments that may be required by Section 3.04. Such funds shall be invested by the Disbursing Agent in short term investments in direct obligations of the United States of America, obligations for which the full faith and credit of the United States of America is pledged to provide for the payment of all principal and interest or commercial paper obligations receiving the highest rating from either Moody’s Investors Service, Inc. or Standard & Poor’s or a combination thereof as directed by Parent; provided that no such investment or loss thereon shall affect the amounts payable or the timing of the amounts payable pursuant to Section 3.04. Any net profits resulting from, or interest or income produced by, such investments shall be payable as directed by the Parent. Upon the first anniversary of the Effective Time, any such cash remaining in the possession of the Disbursing Agent (together with any earnings in respect thereof) shall be delivered to the Surviving Corporation and any holder of Certificates who has not theretofore exchanged such Certificates pursuant to this Article III shall thereafter be entitled to look exclusively to the Surviving Corporation, and only as a general creditor thereof, for the consideration to which such holder may be entitled upon exchange of such Certificates pursuant to this Article III. Notwithstanding the foregoing, neither the Disbursing Agent nor any party hereto shall be liable to any holder of Certificates for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar laws.

(b) Exchange Procedures . Promptly after the Effective Time, but in no event later than ten Business Days thereafter, Parent shall cause the Disbursing Agent to mail or deliver to each Person who was, immediately prior to the Effective Time, a holder of record of Company Common Shares, a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to Certificates shall pass, only upon proper delivery of such Certificates to the Disbursing Agent) containing instructions for use in effecting the surrender of Certificates in exchange for the consideration to which such Person is entitled pursuant to Section 3.01. Upon surrender to the Disbursing

Agent of a Certificate for cancellation together with such letter of transmittal, duly executed and completed in accordance with the instructions thereto, the holder of such Certificate shall promptly be provided in exchange therefor cash in the amount to which such holder is entitled pursuant to Section 3.01, and the Certificate so surrendered shall forthwith be cancelled. No interest will accrue or be paid with respect to any consideration to be delivered upon surrender of Certificates.

(c) Transfer to Holder other than Existing Holder . If any cash payment is to be made in a name other than that in which the Certificate surrendered in exchange therefor is registered, it shall be a condition of such payment that the Person requesting such payment shall pay any transfer or other similar Taxes required by reason of the making of such payment in a name other than that of the registered holder of the Certificate surrendered, or required for any other reason relating to such holder or requesting Person, or shall establish to the reasonable satisfaction of the Disbursing Agent that such Tax has been paid or is not payable.

(d) Transfers . At or after the Effective Time, there shall be no transfers registered on the stock transfer books of the Surviving Corporation of Company Common Shares or Certificates that were outstanding immediately prior to the Effective Time.

(e) Dissenting Shares . Any portion of the Merger Consideration deposited with the Disbursing Agent pursuant to Section 3.04 to pay for the Company Common Shares for which dissenters’ rights shall have been perfected shall be returned to Parent, upon demand.

3.05 Lost Certificates . If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the record holder claiming such Certificate to be lost, stolen or destroyed and, if required by Parent or the Surviving Corporation, the posting by such record holder of a bond, in such reasonable amount as the Surviving Corporation may direct, as indemnity against any claim that may be made against it with respect to such Certificate, the Disbursing Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration to be paid in respect of the Company Common Shares represented by such Certificate as contemplated by this Article III.

3.06 Withholding Rights . Each of the Surviving Corporation and Parent shall be entitled to deduct and withhold from the consideration otherwise payable to any Person pursuant to Article III such amounts as it is required to deduct and withhold with respect to the making of such payment under any applicable provision of Tax law. To the extent that amounts are so deducted or withheld by the Surviving Corporation or Parent, as the case may be, and paid over to the applicable Governmental Entity, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Company Common Shares or other Person in respect of which such deduction and withholding was made by the Surviving Corporation or Parent, as the case may be.

3.07 No Further Ownership Rights in the Company Common Shares . All cash paid upon conversion of the Company Common Shares in accordance with the terms of this Article III

(including cash paid pursuant to Section 3.04) shall be deemed to have been paid in full satisfaction of all rights pertaining to the Company Common Shares.

3.08 Further Assurances . At and after the Effective Time, the officers and directors of the Surviving Corporation shall be authorized to execute and deliver, in the name and on behalf of the Surviving Corporation, Merger Sub or the Company, any deeds, bills of sale, assignments or assurances and to take and do, in the name and on behalf of the Surviving Corporation, Merger Sub or the Company, any other actions and things necessary to vest, perfect or confirm of record or otherwise in Parent or the Surviving Corporation any and all right, title and interest in, to and under any of the rights, properties or assets acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger.

3.09 Adjustment to Per Share Price .

(a) The Company shall provide to Parent on the date of this Agreement a statement (the “Signing Date Statement”) that shall identify (i) by account the amount of cash and marketable securities of the Company, as determined in accordance with GAAP (with, for the avoidance of doubt, any cash and marketable securities that constitute “restricted cash” that secures certain secured obligations of the Company being treated as cash and marketable securities of the Company), as of the close of business on the Business Day immediately preceding the date of this Agreement (such amount being the “Cash at Signing Amount”) which Signing Date Statement includes supporting schedules setting out (A) checks written to accounts but not cleared as of that date, (B) deposits made to accounts but not collected as of that date, (C) a list of the Company’s accounts payable as of such date and (D) bank statements and records dated as of the date of the Signing Date Statement and (ii) the Company’s good faith estimate of the Company Costs.

(b) Parent shall have full access to the Company’s bank records, cash ledgers and statements and all supporting documentation and shall have ten Business Days from the date of Parent’s receipt of the Signing Date Statement to notify the Company of any objections it may have to any item or items (“Disputed Items”) reflected in such statement related to the Cash at Signing Amount (an “Objection Notice”). If (1) Parent does not deliver an Objection Notice within such ten day objection period, (2) Parent acknowledges that the Signing Date Statement is accurate or (3) Parent and the Company enter into an agreement amending the Signing Date Statement, then from and after such time such Signing Date Statement or such amended Signing Date Statement shall be final, binding and conclusive on all parties. If Parent delivers an Objection Notice and Parent and the Company are not able to resolve one or more Disputed Items, then the Disputed Item shall be resolved in accordance with Section 3.09(c) below. Any resolution of Disputed Items pursuant to Section 3.09(c) shall be final, binding and conclusive on each party to this Agreement.

(c) If Parent and the Company shall be unable to resolve any Disputed Items within five Business Days after delivery of an Objection Notice from Parent to the Company, then Wisan Smith Racker & Prescott LLP (the “Arbitrator”) shall be appointed to resolve the disagreement. Within five Business Days of such appointment Parent and

the Company shall present their positions with respect to the Disputed Item(s) to the Arbitrator, together with such other materials as the Arbitrator deems appropriate. The Arbitrator shall, after the submission of the evidentiary materials, deliver its written decision on each Disputed Item and a resulting Signing Date Statement to Parent and the Company within ten Business Days of the appointment of the Arbitrator. The determination of the Arbitrator with respect to any Disputed Item and the Signing Date Statement as delivered by the Arbitrator shall be final, binding and conclusive on each party to this Agreement. The Company and Parent agree that the cost of the Arbitrator shall be borne one-half by each of them.

(d) On or prior to the tenth Business Day prior to the date referred to in the last sentence of Section 3.09(g), the Company shall deliver to Parent a complete and accurate statement (the “Company Cost Statement”) setting out the total amount paid or owed or to be owed by the Company on account of Company Costs, subject to adjustment as set forth in Section 6.04 (such amount, as so adjusted, being the “Company Actual Expense Amount”); provided, however, that the Company Cost Statement and the Company Actual Expense Amount may be updated based on unanticipated developments subsequent to the original delivery thereof and the parties agree that if such definitive Company Cost Statement cannot be agreed upon to the reasonable satisfaction of the parties in the exercise of each party’s reasonable commercial diligence and in accordance with this Section 3.09(d) within the time frame specified by 3.09(g), then the Company Shareholders Meeting shall be adjourned by the Company (unless the Company, in the exercise of reasonable discretion and after consultation with Parent, determines that the resulting or, if not yet resolved in accordance herewith, potential additional adjustment to the Per Share Cash Amount would not require additional disclosure to the Company’s Shareholders) to the earliest later date as will result in compliance with the last sentence of Section 3.09(g) hereof. The Company shall also provide Parent with all records, documents, and any other information that Parent may reasonably request, including, for the avoidance of doubt, access to any third party to whom Company Costs are paid or owed or to be owed for the purpose of verifying the accuracy of the Company Cost Statement. In addition, the Company shall instruct all such third parties to provide all information requested by Parent pursuant to this Section 3.09(d) so that the Parent can verify the accuracy of the Company Cost Statement.

(e) If the Cash at Signing Amount is less than $7,800,000, then the amount of such deficit shall be the “Cash Shortfall Amount”. If there is not a deficit, then the Cash Shortfall Amount shall be $0.

(f) If the Company Actual Expense Amount is greater than the Company Cost Amount, then such amount shall be the “Expense Excess Amount.” If the Expense Excess Amount would be less than $0, then the Expense Excess Amount shall be $0.

(g) If the Cash Shortfall Amount is greater than $0 or if the Expense Excess Amount is greater than $0, then, as stated in Sections 3.01 and 3.03 above, the Per Share Cash Amount shall be adjusted to an amount equal to: (x) $2.75 minus (y) the quotient obtained by dividing (A) the sum of (i) the Cash Shortfall Amount plus (ii) the Expense Excess Amount by (B) the sum of the (i) number of Company Common Shares plus (ii)

the number of Company Common Shares that would be issuable upon the exercise of Eligible Options, after giving effect to any reduction in the number of Eligible Options on account of the reduction in the Per Share Cash Amount that would result from the application of this Section 3.09. The resulting adjusted Per Share Cash Amount shall be rounded to the nearest cent ($.01). The adjusted Per Share Cash Amount shall be established five (5) Business Days prior to the Company Shareholder Meeting.

Article IV

REPRESENTATIONS AND WARRANTIES

4.01 Representations and Warranties of the Company . Except as disclosed in the Company Disclosure Letter (subject to the last sentence of Section 9.03(a)), the Company hereby represents and warrants to Parent as follows:

(a) Corporate Organization . The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Utah. The Company has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified would not, either individually or in the aggregate, have a Material Adverse Effect on the Company. True and complete copies of the Articles of Incorporation and Company By-Laws, as amended, of the Company, as in effect as of the date of this Agreement, have previously been provided by the Company to Parent. Except as set out on Section 4.01(a) of the Company Disclosure Letter, the Company has no Subsidiary and does not own any shares of capital stock or other securities or have any right or obligation to acquire the capital stock or other securities of any other Person.

(b) Capitalization .

(1) The authorized capital shares of the Company consists of (A) 100,000,000 Company Common Shares, of which, as of the date hereof, 7,683,856 shares were issued and outstanding and no shares were held in treasury and (B) 10,000,000 Company Preferred Shares, of which no shares are issued and outstanding. From June 30, 2006 to the date of this Agreement, none of the Company Capital Shares have been issued except pursuant to the Company Stock Plans. All issued and outstanding Company Common Shares have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. As of the date of this Agreement, except pursuant to the terms of the Company Stock Options, the Company does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any of the Company Capital

Shares or any other equity securities of the Company or any securities of the Company representing the right to purchase or otherwise receive any of the Company Capital Shares. As of the date hereof, no Company Capital Shares were reserved for issuance. As of the date hereof, the Company Stock Options represent the right to acquire 1,190,097 Company Common Shares. Other than pursuant to such Company Stock Options, as of the date hereof, none of the Company Common Shares is issuable in connection with outstanding awards under the Company Stock Plans or other compensatory arrangements. Since June 30, 2006, no Company Common Shares have been issued except in connection with the exercise of Company Stock Options. There are not as of the date of this Agreement and there will not be at the Effective Time any shareholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any of the Company Capital Shares. To the Company’s Knowledge (such Knowledge being the Knowledge of the Company as of the date of this Agreement), except for the Voting Agreement no shareholder is, as of the date of this Agreement, a party to or holds Company Common Shares bound by or subject to any voting agreement, voting trust, proxy or similar arrangement.

(2) Except as set out on Section 4.01(b)(2) of the Company Disclosure Letter, the Company has no subsidiaries and does not own, directly or indirectly, any capital shares, equity interest or other ownership interest in any corporation, partnership, association, joint venture, limited liability company or other entity and the Company has no options, warrants or obligations to acquire any such shares or interest.

(c) Authority .

(1) The Company has full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. At a meeting of the Board of Directors duly called and held, the Board of Directors of the Company, has by unanimous vote of those directors present (A) determined that this Agreement and the transactions contemplated hereby are advisable and in the best interests of the Company Shareholders, (B) approved the execution and delivery of this Agreement and (C) recommended that this Agreement be adopted by the holders of the Company Common Shares and (D) directed that this Agreement be submitted to the Company shareholders at a meeting of the Company shareholders for the purpose of adopting this Agreement (the “Company Shareholders Meeting”). Except for the adoption of this Agreement by the affirmative vote of the holders of a majority of the outstanding Company Common Shares at a properly convened meeting of shareholders at which a quorum is present (the “Company Shareholder Approval”), no other corporate proceedings on the part of the Company are necessary to approve this Agreement and to consummate the transactions contemplated hereby. Each director of the Company who has a right to vote any Company Common Shares has represented to the Company his or her present intention to vote such Company Common Shares in favor of the Merger, this Agreement and the

transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company and (assuming due authorization, execution and delivery by Parent and Merger Sub) constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the effects of bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, and general equitable principles (whether considered in a proceeding in equity or at law).

(2) Neither the execution and delivery of this Agreement by the Company, nor the consummation by the Company of the transactions contemplated hereby, nor compliance by the Company with any of the terms or provisions hereof, will (A) violate or breach any provision of the Articles of Incorporation or Company By-Laws or (B) assuming that the consents, approvals, authorizations, exemptions, filings and registrations referred to in Section 4.01(d) are duly obtained and made, (I) violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to the Company or any of its properties or assets or (II) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event that, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, accelerate any right or benefit provided by, or result in the creation of any Lien upon any of the respective properties or assets of the Company under, any of the terms, conditions or provisions of any Company Contract, except in the case of clause (B) above, for such violations, conflicts, breaches, losses, defaults, terminations, cancellations, accelerations or Liens that, either individually or in the aggregate, would not have a Material Adverse Effect on the Company.

(d) Consents and Approvals .

(1) Except for (A) compliance by the Company with any applicable requirements under any Regulatory Law, set forth in Section 4.01(d)(1) of the Company Disclosure Letter, (B) the filing with the SEC of a proxy statement relating to the matters to be submitted to the Company shareholders at the Company Shareholders Meeting (such proxy statement, and any amendments or supplements thereto, the “Proxy Statement”), (C) the filing of the Articles of Merger pursuant to the Revised Act, (D) any consents, authorizations, approvals, filings or exemptions in connection with compliance with the rules of the Amex, (E) the consents and approvals listed on Section 4.01(d)(1) of the Company Disclosure Letter and (F) such other consents, approvals, filings and registrations the failure of which to obtain or make would not, individually or in the aggregate, have a Material Adverse Effect on the Company, no consents or approvals of or filings or registrations with any Governmental Entity are necessary in connection with either the execution and delivery by the Company of this Agreement or the consummation by the Company of the transactions contemplated by this Agreement.

(2) Other than as referred to in Section 4.01(d)(2) of the Company Disclosure Letter (the “Company Approvals”), no notices, reports or other filings are required to be made by the Company with, nor are any consents, registrations, approvals, permits or authorizations required to be obtained by the Company from, any Governmental Entity, in connection with the execution, delivery and performance of this Agreement by the Company and the consummation of the Merger and the other transactions contemplated hereby, except those that the failure to make or obtain would not, individually or in the aggregate, have a Material Adverse Effect or prevent, materially delay or materially impair the consummation of the transactions contemplated by this Agreement.

(3) Except as set out on Section 4.01(d)(3) of the Company Disclosure Letter, the execution, delivery and performance of this Agreement by the Company do not, and the consummation of the Merger and the other transactions contemplated hereby will not, constitute or result in (A) a breach or violation of, a termination (or right of termination) or default under, the creation or acceleration of any obligations under, or the creation of a Lien on any of the assets of the Company pursuant to, any Significant Contract, or (B) any change in the rights or obligations of any party under any Significant Contract binding upon the Company or any of its properties except for any such breach, violation, termination, default, creation, acceleration or change that would not, individually or in the aggregate, have a Material Adverse Effect on the Company.

(e) Financial Reports and SEC Documents .

(1) The Company 2006 10-K, the December 10-Q and all other reports, registration statements, definitive proxy statements or information statements filed or to be filed by the Company subsequent to June 30, 2006 under the Securities Act or under Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act in the form filed, or to be filed (except that no representation or warranty is made by the Company with respect to information supplied by Parent for inclusion in the Proxy Statement), with the SEC (collectively, the “Company SEC Documents”), (x) complied or will comply in all material respects as to form with the applicable requirements under the Securities Act or the Exchange Act, as the case may be, and (y) as of their respective filing dates (except as amended or supplemented prior to the date of this Agreement), (A) did not or will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; and (B) each of the balance sheets contained in or incorporated by reference into any such Company SEC Document (including the related notes and schedules thereto) fairly presents or will fairly present the financial position of the entity to which it relates as of its date, and each of the statements of income and changes in shareholders’ equity and cash flows or equivalent statements in such Company SEC Documents (including any related notes and schedules thereto) fairly presents or will fairly present the results of operations, changes in shareholders’ equity and changes in cash flows, as the case may be, of the entity to which it

relates for the periods to which it relates, in each case in accordance with GAAP consistently applied during the periods involved, except, in each case, as may be noted therein, subject to normal year-end audit adjustments in the case of unaudited statements.

(2) The records, systems, controls, data and information of the Company are recorded, stored, maintained and operated under means that are under the exclusive ownership and direct control of the Company or its accountants, except for any non-exclusive ownership and non-direct control that would not have a Material Adverse Effect on the system of internal accounting controls described in the following sentence. The Company has devised and maintains a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that: (1) transactions are executed only in accordance with management’s authorization; (2) transactions are recorded as necessary to permit preparation of the financial statements of the Company and to maintain accountability for the assets of the Company; (3) access to such assets is permitted only in accordance with management’s authorization; and (4) the reporting of such assets is compared with existing assets at regular intervals. The Company (1) has designed disclosure controls and procedures (within the meaning of Rules 13a-15(e) and 15d-15(e) of the Exchange Act) to ensure that material information relating to such entity is made known to the officers by others within the Company as appropriate to allow timely decisions regarding required disclosure and to make the certifications required by the Exchange Act with respect to the Company SEC Documents, and (2) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to its auditors and the audit committee of its Board of Directors (A) any significant deficiencies in the design or operation of internal controls which reasonably could or would adversely affect in any material respect its ability to record, process, summarize and report financial data and has disclosed to its auditors any material weaknesses in internal controls and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in its internal controls over financial reporting.

(3) Since June 30, 2006, through the date hereof, (x) none of the Company, its Chief Executive Officer, its Chief Financial Officer or any member of the Audit Committee, has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, from any source regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or its internal accounting controls, including any material complaint, allegation, assertion or claim that the Company has engaged in questionable accounting or auditing practices, and (y) no attorney representing the Company, whether or not employed by the Company, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by the Company or any of its officers, directors, employees or agents to the Company Board of Directors, its audit committee or Chief Executive Officer of the Company.

(4) The Company is in compliance with the provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) that are applicable to the Company, except where such non-compliance would not have a Material Adverse Effect on the Company. Each of the principal executive officer of the Company and the principal financial officer of the Company (or each former principal executive officer of the Company and each former principal financial officer of the Company, as applicable) has made all certifications required by Rule 13a-14 or Rule 15d-14 under the Exchange Act or Sections 302 and 906 of the Sarbanes-Oxley Act and the rules and regulations of the SEC promulgated thereunder with respect to Company SEC Documents. For purposes of the preceding sentence, “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act.

(f) Absence of Undisclosed Liabilities . The Company did not have at June 30, 2006, nor has it incurred since that date, any liabilities or obligations (whether absolute, accrued, contingent or otherwise) of any nature, except, as disclosed in Section 4.01(f) of the Company Disclosure Letter, (1) liabilities and obligations (whether absolute, accrued, contingent or otherwise) that (A) are accrued or reserved against in the financial statements in the Company 2006 10-K or reflected in the notes thereto or (B) were incurred in the ordinary course of business consistent with past practice, (2) liabilities and obligations (whether absolute, accrued, contingent or otherwise) that (A) would not, individually or in the aggregate, have a Material Adverse Effect on the Company, or (B) have been discharged or paid in full prior to the date hereof, and (3) liabilities and obligations (whether absolute, accrued, contingent or otherwise) which are not required to be reflected in the Company’s financial statements prepared in accordance with GAAP consistently applied.

(g) Absence of Certain Changes or Events . Since June 30, 2006, the Company has conducted its business only in the ordinary course, and since such date there has not been:

(1) except as set out on Section 4.01(g)(1) of the Company Disclosure Letter, any event, change, effect or development that, individually or in the aggregate, has had a Material Adverse Effect on the Company;

(2) prior to the date of this Agreement, any declaration, setting aside or payment of any dividend or other distribution (whether in cash, shares or property) with respect to any Company Capital Shares or any repurchase for value by the Company of any Company Capital Shares;

(3) prior to the date of this Agreement, any split, combination or reclassification of any Company Capital Shares or any issuance (other than the pursuant to the exercise of Company Stock Options) or the authorization of any issuance (other than in connection with the issuance of Company Stock Options, which are disclosed in Section 4.01(g)(3) of the Company Disclosure Letter) of any other securities in respect of, in lieu of or in substitution for shares of the Company Capital Shares;

(4) prior to the date of this Agreement, except as set forth in Section 4.01(g)(4) of the Company Disclosure Letter, (A) any granting by the Company to any director or executive officer of the Company of any increase in compensation, except in the ordinary course of business consistent with prior practice or as was required under employment agreements included in the Company SEC Documents, (B) any granting by the Company to any such director or executive officer of any increase in severance or termination pay, except as was required under any employment, severance or termination agreements included in the Company SEC Documents, or (C) any entry by the Company into, or any amendment of, any employment, severance or termination agreement with any such director or executive officer; or

(5) prior to the date of this Agreement, any change in financial accounting methods, principles or practices by the Company materially affecting the assets, liabilities or results of operations of the Company, except insofar as may have been required by a change in GAAP, provided that any such change required by GAAP is specifically identified in Section 4.01(g)(5) of the Company Disclosure Letter.

(h) Legal Proceedings . Except as set forth in Section 4.01(h)(1) of the Company Disclosure Letter, there is no suit, action or proceeding pending or, to the Company’s Knowledge, threatened in writing since January 1, 2002, against the Company that has not been fully and finally adjudicated, settled and/or resolved that would have, individually or in the aggregate, a Material Adverse Effect on the Company, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against the Company having any such effect. The Company is not currently the subject of any investigation, inquiry or proceeding by any Governmental Entity the result of which would have a Material Adverse Effect on the Company, except for regular audits of submissions and other regular regulatory audits and reviews of the Company by the FDA and similar state regulatory agencies in the ordinary course. To the Knowledge of the Company, there are no grounds for any investigation of, or inquiry or proceeding against the Company by any Governmental Entity the result of which would have a Material Adverse Effect on the Company. No written notice of any exclusion, sanction, or violation, asserted deficiency, or other irregularity has been received by the Company or any of its officers or managing employees from any Governmental Entity (or any Governmental Entity’s designated agent or agents) that would result in or, would reasonably be expected to result in sanctions, fines or penalties monetary or non-monetary being imposed against the Company that would have a Material Adverse Effect on the Company. Section 4.01(h)(2) of the Company Disclosure Schedule Letter contains a list of all pending litigation against the Company as of the date of this Agreement.

(i) Compliance with Applicable Law . To the Knowledge of the Company, it (A) holds all licenses, franchises, permits and authorizations necessary for the lawful conduct of its business (“Licenses”) as it is and has been conducted, and have complied in all respects with and are not in default in any respect under any applicable law, statute, order, rule, regulation, policy and/or guideline and (B) it is in compliance and has been in

compliance with all applicable laws, statutes, orders, rules and regulations of any Governmental Entity relating to it and its properties (“Applicable Law”), except where the failure to hold such license, franchise, permit or authorization or such noncompliance would not, either individually or in the aggregate, have a Material Adverse Effect on the Company.

(j) Environmental Matters . Except for matters that individually or in the aggregate would not have a Material Adverse Effect on the Company, (1) the Company is and, for the last five years, has been in compliance with all applicable Environmental Laws and has obtained all Environmental Permits necessary for its operations as currently conducted; (2) there have been no Releases of any Hazardous Materials that are reasonably likely to give rise to any Environmental Liabilities against the Company; (3) there are no Environmental Liabilities pending or, to the Knowledge of the Company, threatened in writing against the Company; (4) the Company is not subject to any agreement, order, judgment or decree, including settlements, by or with any Governmental Entity or third party imposing any liability or obligation under any Environmental Law; and (5) the Company has not retained or assumed, either contractually or by operation of law, any liability or obligation that would reasonably be expected to have formed the basis of any environmental Claim against the Company. To the Knowledge of the Company, there are no Hazardous Materials present in or on, under or related to or emanating or migrating from any of the properties owned or operated by the Company in concentrations that are reasonably likely to give rise to an obligation to conduct a Remedial Action pursuant to Environmental Laws. The Company has provided to Parent copies of all documents, reports and correspondence in its possession that reflect any pending or threatened in writing regarding Environmental Liabilities that would result in or reasonably be expected to result in Claims against the Company in excess of $25,000 for any individual Claim or $50,000 in the aggregate .

(k) Employee Benefit Plans; Labor Matters .

(1) With respect to each U.S. Company Benefit Plan, the Company has provided to Parent a correct and complete copy of each writing constituting such U.S. Company Benefit Plan. Section 4.01(k)(1) of the Company Disclosure Letter sets out a list of all U.S. Company Benefit Plans. In addition, the Company has delivered to Parent, as to each U.S. Company Benefit Plan, a complete and accurate copy of (a) each plan, agreement or arrangement listed, (b) the trust, group annuity contract or other document which provides the funding for the plan, agreement or arrangement, (c) the most recent annual Form 5500, 990 and 1041 reports, (d) the most recent actuarial report or valuation statement, (e) the most current summary plan description, booklet, or other descriptive written materials, and each summary of material modifications prepared after the last summary plan description, (f) all other correspondence from the IRS or the Department of Labor received which relates to one or more of the U.S. Company Benefit Plans. The Internal Revenue Service has issued a favorable determination letter with respect to each U.S. Company Benefit Plan that is intended to be a “qualified plan” within the meaning of Section 401(a) of the Code and the related trust that has not been revoked, or the remedial amendment period for submitting such U.S. Company

Benefit Plan to the Internal Revenue Service has not expired, and, to the Knowledge of the Company, there are no existing circumstances and no events have occurred that would or would reasonably be expected to result in the revocation of such favorable determination letter.

(2) With respect to each Company pay plan, policy or practice addressing separation or severance pay or benefits, the Company has provided to Parent all information and documentation addressing, supporting or constituting such plan, policy or practice.

(3) (A) Except as would not, individually or in the aggregate, have a Material Adverse Effect on the Company, each of the U.S. Company Benefit Plans has been operated and administered in all respects in accordance with its terms and Applicable Law and administrative rules and regulations of any Governmental Entity, including, but not limited to, ERISA and the Code, and (B) has had the appropriate Form 5500 filed, timely, for each year of its existence; (C) has not engaged in any transaction described in Sections 406 or 407 of ERISA or Section 4975 of the Code unless exempt under Section 408 of ERISA or Section 4975 of the Code, as applicable; (D) has at all times complied with the bonding requirements of Section 412 of ERISA; and (E) except as would not, individually or in the aggregate, have a Material Adverse Effect on the Company, there have been no audits, investigations, claims (other than claims for benefits in the ordinary course), lawsuits, arbitrations or examinations pending or threatened of or against any of the U.S. Company Benefit Plans, and, to the Knowledge of the Company, no set of circumstances exists that would or would reasonably be expected to give rise to a claim or lawsuit, against the U.S. Company Benefit Plans, any fiduciaries thereof with respect to their duties to the U.S. Company Benefit Plans or the assets of any of the trusts under any of the U.S. Company Benefit Plans that would reasonably be expected to result in any liability of the Company or any of its ERISA Affiliates to the PBGC, the U.S. Department of the Treasury, the U.S. Department of Labor, any U.S. Company Benefit Plan, any participant in a U.S. Company Benefit Plan, or any other party.

(4) There do not now exist, and to the Knowledge of the Company, there are no existing circumstances that would reasonably be expected to result in, any liabilities under Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code (other than for payments of premium contributions in the ordinary course to the PBGC) that, individually or in the aggregate, would have a Material Adverse Effect on the Company. Except as set out on Section 4.01(k)(4) of the Company Disclosure Letter, the Company does not provide retiree health or life insurance coverage under any of its U.S. Company Benefit Plans.

(5) As of the date of this Agreement, neither the Company nor any of its ERISA Affiliates is not is a party to any collective bargaining or other labor union contract applicable to individuals employed by the Company or any of its ERISA Affiliates, and no such collective bargaining agreement or other labor union contract is being negotiated by the Company or any of its ERISA Affiliates.

There has been no “reportable event” (as defined in Section 4043(b) of ERISA and the regulations under that Section) with respect to any employee pension benefit plan subject to Title IV of ERISA. Neither the Company nor any of its ERISA Affiliates has ceased operations at a facility so as to become subject to the provisions of Section 4062(e) of ERISA, withdrawn as a substantial employer so as to become subject to the provisions of Section 4063 of ERISA or ceased making contributions on or before the date of the Closing to any employee pension benefit plan subject to Section 4064(a) of ERISA to which the Company or any of its ERISA Affiliates made contributions at any time during the six years prior to the date of Closing. Neither the Company nor any of its ERISA Affiliates is a party to any multiemployer pension plan and has not made a complete or partial withdrawal from a multiemployer plan (as defined in Section 3(37) of ERISA) so as to incur withdrawal liability as defined in Section 4201 of ERISA. Except as would not, individually or in the aggregate, have a Material Adverse Effect on the Company, (A) there is no labor dispute, strike, slowdown or work stoppage against the Company pending or threatened against the Company, (B) no unfair labor practice or labor charge or complaint is pending or threatened in writing, with respect to the Company or any of its ERISA Affiliates, and (C) to the Knowledge of the Company and its ERISA Affiliates, the Company and its Affiliates are in compliance with all Applicable Law relating to employment, employment practices, wages, hours, terms and conditions or employment, employment discrimination, disability rights, workers’ compensation, employee leaves, occupational safety and health and the collection and payment of employment taxes. Except as set forth on Section 4.01(k)(5) of the Company Disclosure Letter, since December 31, 2003, the Company has not been subject to any claims, actions, charges of discrimination, investigations or audits regarding its employment practices.

(6) Neither the Company nor any ERISA Affiliate of the Company has any liability, contingent or otherwise, with respect to a multiemployer plan (as defined in Section 3(37) of ERISA).

(7) Except as set out on Section 4.01(k)(7) of the Company Disclosure Letter, no U.S. Company Benefit Plan provides medical, surgical, hospitalization, pharmaceutical, or life insurance benefits (whether or not insured by a third party) for employees or former employees of the Company or any ERISA Affiliate of the Company, for periods extending beyond their retirements or other terminations of service, other than coverage mandated by Section 4980 of the Code or similar State law, and no commitments have been made to provide such coverage.

(8) All accrued obligations of the Company and its ERISA Affiliates, whether arising by operation of law, contract, or past custom, for compensation and benefits, including, but not limited to, bonuses and accrued vacation, and benefits under U.S. Company Benefit Plans, have been paid or adequate accruals for such obligations as such existed on December 31, 2006 are reflected on the Company December 10-Q.

(9) Section 4.01(k)(9) of the Company Disclosure Letter sets forth an accurate and complete list of each U.S. Company Benefit Plan under which the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby would or would reasonably be expected to (either alone or in conjunction with any other event, such as termination of employment), result in, cause the accelerated vesting, funding or delivery of, or increase the amount or value of, any payment or benefit to any employee, officer or director of the Company or any of its ERISA Affiliates, or would limit the right of the Company or any of its ERISA Affiliates to amend, merge, terminate or receive a reversion of assets from any U.S. Company Benefit Plan or related trust or any material employment agreement or related trust. No amount paid or payable (whether in cash, in property, or in the form of benefits, accelerated cash, property, or benefits, or otherwise) in connection with the transactions contemplated hereby (either solely as a result thereof or as a result of such transactions in conjunction with any other event) will be an “excess parachute payment” within the meaning of Section 280G of the Code.

(l) Taxes . The Company (i) has prepared in good faith and duly and timely filed (taking into account any extension of time within which to file) by the Closing Date all Tax Returns required to be filed by any of them and all such filed Tax Returns are complete and accurate in all material respects; (ii) has timely paid all Taxes that are required to be paid or that the Company is obligated to withhold and pay from amounts owing to any employee, creditor or third party, except with respect to matters contested in good faith (whether or not shown on any Tax Return) and for which adequate reserves have been established on the books of the Company in accordance with GAAP; (iii) has not waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency other than those that have been fully and finally resolved; and (iv) has properly accrued, and the unpaid Taxes do not exceed the reserve for Taxes reflected in the financial statements, for all Tax liabilities related to Tax Returns filed by or with respect to the Company. As of the date hereof, there are not pending or, to the Knowledge of the Company, threatened in writing, any audits, examinations, investigations or other proceedings in respect of Taxes or Tax matters. Except as set out on Section 4.01(l) of the Company Disclosure Letter, no written notification from a Governmental Entity in a jurisdiction where the Company does not file Tax Returns has been delivered to the Company which notification indicates that the Company may be subject to taxation by that jurisdiction. No power of attorney granted by the Company with respect to any Tax is currently in force. The Company has withheld or collected and paid over to the appropriate Governmental Entity all Taxes required to be withheld or collected, including withholding of Taxes pursuant to Section 1441 and 1442 of the Code or similar provisions under any foreign laws. There are not, to the Knowledge of the Company, any unresolved questions or claims concerning the Company’s Tax liability that would, individually or in the aggregate, have a Material Adverse Effect on the Company. The Company has provided to the Parent true and correct copies of the United States federal income Tax Returns filed by the Company for each of the fiscal years ended June 30, 2006, 2005, and 2004. No Tax is required to be withheld pursuant to Section 1445 of the Code as a result of the Merger. The Company has not participated in any reportable transactions within the meaning of Treasury

Regulations Section 1.6011-4. The Company has not been a member of a consolidated group of companies for tax purposes. The Company is not a party to, or otherwise bound by or subject to (whether as a transferee, successor or otherwise) (i) any advance pricing agreement, closing agreement or other agreement relating to Taxes with any Governmental Entity or (ii) any tax sharing, allocation or indemnity obligation in favor of any third party. The Company is not a party to any agreement, contract, arrangement or plan that has resulted or would result, separately or in the aggregate, in the payment of (i) any “excess parachute payments” within the meaning of Section 280G of the Code (without regard to the exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of the Code) or (ii) any amount for which a deduction would be disallowed or deferred under Section 162 or Section 404 of the Code. Except for those restricted shares granted to officers and employees, none of the outstanding capital shares of the Company is subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code.

(m) Contracts .

(1) As of the date of this Agreement, except as set forth in Section 4.01(m)(1) of the Company Disclosure Letter, the Company is not a party to or bound by:

(A) any lease, rental or occupancy agreement, license, installment or conditional sale agreement affecting real or personal property providing for annual payments of $25,000 or more;

(B) any Contract, excluding current accounts payable and accounts receivable arising in the ordinary course of business, not terminable without penalty on 60 days or less notice that requires future aggregate payments to or from the Company of more than $25,000;

(C) any partnership, joint venture, joint development or marketing or other similar agreement or arrangement relating to the formation, creation, operation, management or control of any partnership or joint venture or of any other joint arrangement material to the Company or in which the Company owns more than a 15% voting or economic interest, or any interest valued at more than $25,000 or $100,000 in the aggregate without regard to percentage voting or economic interest;

(D) any Contract relating to (x) indebtedness for borrowed money or (y) the deferred purchase price of property (in either case, whether incurred, assumed, guaranteed or secured by any asset) in excess of $25,000;

(E) any Contract required to be filed as an exhibit to the Company’s Annual Report on Form 10-K pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act, which has not been filed as required;

(F) any non-competition Contract or other Contract that (I) purports to limit in any material respect either the type of business in which the Company (or, after the Effective Time, Parent or its Subsidiaries) may engage or the manner or locations in which any of them may so engage in any business, (II) could require the disposition of any material assets or line of business of the Company or, after the Effective Time, Parent or its Subsidiaries, or (III) grants “most favored nation” status that, following the Merger, would apply to Parent and its Subsidiaries, including the Company;

(G) any Contract to which the Company is a party co

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